They share fast growth, a strong national history and a sense that the future will be great.
Photographer: Zacharias Abubeker/AFP/Getty Images
Will Ethiopia become “the China of Africa”? The question often comes up in an economic context: Ethiopia’s growth rate is expected to be 8.5 percent this year, topping China’s projected 6.5 percent. Over the past decade, Ethiopia has averaged about 10 percent growth. Behind those flashy numbers, however, is an undervalued common feature: Both countries feel secure about their pasts and have a definite vision for their futures. Both countries believe that they are destined to be great.
Consider China first. The nation-state, as we know it today, has existed for several thousand years with some form of basic continuity. Most Chinese identify with the historical kingdoms and dynasties they study in school, and the tomb of Confucius in Qufu is a leading tourist attraction. Visitors go there to pay homage to a founder of the China they know.
This early history meant China was well-positioned to quickly build a modern and effective nation-state, once the introduction of post-Mao reforms boosted gross domestic product. That led to rapid gains in infrastructure and education, and paved the way for China to become one of the world’s two biggest economies. Along the way, the Chinese held to a strong vision that it deserved to be a great nation once again.
My visit to Ethiopia keeps reminding me of this basic picture. Ethiopia also had a relatively mature nation-state quite early, with the Aksumite Kingdom dating from the first century A.D. Subsequent regimes, through medieval times and beyond, exercised a fair amount of power. Most important, today’s Ethiopians see their country as a direct extension of these earlier political units. Some influential Ethiopians will claim to trace their lineage all the way to King Solomon of biblical times.
In other words, the process of organized, national-level governance has been underway for a long time. It was this relative strength of Ethiopian governance that allowed the territory to fend off colonialism, a rare achievement. It is also why, when you travel around the country, a lot of the basic cuisine doesn’t change much: Dishes are seen as national and not regional.
It is thus no surprise that once Ethiopia abandoned its 1970s communist ideology and put some basic reforms into place, its government was able to rise to the occasion. The infrastructure is remarkably good by regional standards, and the Ethiopian government is known for conducting a relatively successful industrial policy. The state-owned Ethiopian Airlines is run as a responsible business, it is becoming a major air power, and standards of service are high.
The Ethiopians I have interacted with express a remarkable degree of enthusiasm for their country and culture. Maybe that isn’t unusual in a rapidly growing nation, but I’ve been struck by how historically rooted these sentiments have been. Ethiopians are acutely aware of their past successes, including their role in biblical history. Like many Iranians, they think of themselves as a civilization and not just a country. They very self-consciously separate themselves from the broader strands of African history and culture. And, as in China, they hold an ideological belief that their country is destined to be great again.
China and Ethiopia intersect in yet another way, with the Chinese helping to build the place up. There are new and modern apartment buildings scattered around Addis Ababa, built by the Chinese, a light rail system in Addis that would look nice in any country, impressive dams for hydroelectric power, and a high-speed rail connection to Djibouti and the coast.
The pride of Ethiopians in their history and freedom from colonialism may help explain why the nation has accepted so much Chinese infrastructure involvement with little evidence of the angst that has plagued some other parts of Africa. The intuitive background assumption in Ethiopia is that foreigners may try to interfere, but the government won’t lose control. There are prominent statues in Addis Ababa celebrating how the Ethiopians drove out both the Italians and the British.
Just to be clear, Ethiopia is hardly a finished nation-state. There are festering disputes with Eritrea to the north, a place many Ethiopians strongly feel belongs to them. The southern and more tribal parts of the country are not always well integrated into the major commercial centers ruled by the highlanders, and there are clashes with the Oromia and Somali regions to the east. For those reasons, the national optimisms found in the better developed parts of the country are not found everywhere.
That said, if you are looking for a special place in Africa, Ethiopia may be your best bet. But to understand its recent success, you have to go beyond policy — it is also a matter of their history, their confidence and, above all, their ideas.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the editor responsible for this story:
Stacey Shick at sshick@bloomberg.net
If would-be allies had any remaining confidence in U.S. policies, the handling of the China dispute has sapped it.
Photographer: Chip Somodevilla/Getty Images
In any “trade war,” the most important thing to remember is the limit of the martial metaphor. When a foreign company sells Americans something they choose to buy, it is not an act of aggression. Trade negotiations aren’t a zero-sum game in which one country wins and the other has to lose.
The point is being forgotten right now, and not just by protectionists. Practically everyone is saying that President Donald Trump is losing, surrendering, caving or capitulating to China. But “losing” may be a victory for the American economy, given some of the alternative outcomes.
That’s not to say that the “China hawks” in the administration — there’s that martial language again! — are wrong about everything. Chinese tariffs against American exports, theft of intellectual property, forced technology transfer: All are legitimate American grievances. The hawks appear to be focused on getting long-term policy change on all these issues.
The doves, on the other hand, seem to be more interested in extracting promises of a rapid reduction in the U.S. trade deficit with China. Looking narrowly at those competing objectives, the hawks have the better of the argument, both because promises that the bilateral deficit will fall are worth little and because that deficit is not in itself especially important.
So you can see why even some people who have in the past generally been free-traders, such as Republican Senator Marco Rubio, have been urging President Trump to “stay strong” and ruing administration concessions.
But the hawks and their new allies are acting as though we are bound either to get what they want or what the doves want. If those were the only choices, they might be right. There are, however, other possibilities. One is a standoff that yields new tariffs on both sides, which would harm both countries’ economies. Even worse would be an escalating trade war that undermined the global trading system as a whole.
That last scenario does not have to be likely to be alarming. And the administration’s hapless conduct of trade diplomacy so far raises that probability.
A well-considered strategy for fighting Chinese mercantilism would have started very differently. President Trump would have kept the U.S. in the Trans-Pacific Partnership, an agreement that was partly designed for that very purpose. Instead he attacked it during his campaign, savagely if vaguely: It amounted to “a rape of our country,” even though he never identified any feature of it to which he objected. He withdrew from it once in office. Last month he said he might rejoin it, then seemed to change his mind again a few days later.
A strategy against Chinese mercantilism would have used the World Trade Organization. Instead Trump has criticized it, mused about leaving it, and imposed tariffs outside it.
Trump’s tariffs on steel and aluminum, and the manner of their implementation, have also undermined the fight against Chinese mercantilism. First he threatened unilateral tariffs that covered many countries that share our interests with respect to China. His aides insisted there would be no exemptions; then exemptions were granted for most imports, but only on a temporary basis. The message the world received: We are not interested in working with you on trade matters, but we also can’t be assumed to be serious about following through on what we say about them.
If would-be allies had any remaining confidence in our trade policies, our handling of the China dispute has sapped it. The administration’s negotiators plainly don’t agree with one another, and the president has not settled their disagreements. All in all the administration’s actions are isolating the U.S. rather than China.
The president has great confidence in his deal-making ability, but little demonstrated knowledge about trade policy, conflicting impulses and infighting aides (two of whom, Commerce Secretary Wilbur Ross and trade czar Peter Navarro, do not appear to understand the basics of national accounting). The possibility that we will stumble into truly damaging trade conflict cannot be dismissed. Take that possibility into account, and the doves have reached the right conclusion: It would be best for the administration to find a way to declare victory and get out of this trade battle.
Equities have risen on the news of Trump’s “surrender.” The market appears to think that for Trump to hang tough would be more likely to harm than help the economy. With good reasons to agree and no strong reasons to disagree, we should trust that judgment.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net
Source – Bloomberg